Credit Card vs Cash, not so easy anymore..Thoughts?

[Money Manager]

So I need some help with ditching the credit cards in favour of cash.

I have 3 cards which I pay off all the time and have not carried a balance in 5 years+.

The difficulty is I am putting a lot more now a days on to my cards and finding it annoying to keep track of everything. Cash seems to be a easy way to make sure I am not over spending.

Problem is my credit cards offer 4% back on almost all my purchases. I earn on average 900$ a year after card fees by using them. Is it worth ditching them to maybe regain control?

I would keep one small one for online stuff. Just not use it everyday for everything.

Thanks!

[ptgearguy]

It sounds to me like you need to better manage your money and control where it is going. It doesnt sound much like a cc versus cash problem. I personally find CC quite easy to manage as I see where all my spending goes. I also spend in a very routine manner and if it is outside my routine I am very conscious of the extra expense.

I hate managing cash and find it an infinite hassle to drop by the bank weekly or monthly. Waste of my time imo. 

[golfreak12]

I hate using cash. Its like I'm wasting my spending power.
People always say using CC makes you want to spend more but I have a strict expense budget and that deter me from spending too much.

[seattlecyclone]

Yeah, I'll agree with the others when I say I find credit cards help me track and control things better than cash. With cash if I don't keep the receipt I'll never be able to remember what I spent the money on. Cash only helps you control your spending to the extent that you're strictly limited to spending whatever you happen to have in your wallet that day. If you need that sort of limitation to keep your spending under control you should use it, but you should also evaluate where the problem really is. Do you tend to spend impulsively? Stop! Cash might limit the damage but the real problem is that you have a habit of spending money without thinking about it.

Meanwhile there are plenty of benefits for using credit cards. I have records of purchases so I can identify trends in our spending and make an effort to keep costs in certain areas under control if they have increased lately. I also get money back from using credit cards.

[firelight]

Just curious, what card gives you 4% on almost all categories?

[Money Manager]

I live in Canada, I use the Visa Infinite from Scotiabank, which is 4% on Gas and Groceries. My Amex Gold is 4% on Gas Groceries, Dining and Entertainment. Mostly everything else is 2% like recurring bills. TO get 4% on things like Best Buy I buy gift cards from grocery stores for the purchase.

[RetiredAt63]

You sound like the CCs are not the problem.  Your tracking is.  Tracking is harder with cash, you have to write it down as you spend it or keep all receipts.  Have you tried Mint or YNAB?

I have 3 cards which I pay off all the time and have not carried a balance in 5 years+.

The difficulty is I am putting a lot more now a days on to my cards and finding it annoying to keep track of everything. Cash seems to be a easy way to make sure I am not over spending.

[ender]

YNAB + smartphone app ==> tracking is trivial, regardless of what mode you spend.

[2buttons]

I have found that I am just not built to manage credit cards, and unlike others, I have found that debit card + cash for certain things is my best and simplest straightforward option. I got annoyed by constantly reimbursing my credit card throughout the month and tracking things, which I found was a complete waste of my time.

Your "rewards" work out to $75 a month. If you are overspending by that amount it's a wash. More than that, it's not smart. Under that amount, then you are clearly coming out ahead.

If I were you, I would go through the the process of trial and error and figure out what works best for you. Try cash for a couple months, then go back and do cards for a couple of months.

As others say, YMMV.

[CCEddy54]

Hi, I am with you on the using cash instead of cc. Some people can do the whole cc - rewards and stay with in the budget. I find cash is less stressful for me. I may go back to cc when debt is paid off and life is simpler but for the next year cash is king. I will pay with cc for big things like home repairs or car repairs. I think we need to find out what works for us and not worry.

[Sibley]

OP, your problem isn't CC or cash. It really is sticking to your budget. If it's easier for you to do with cash, then go that way for a while. Maybe you'll be able to train yourself enough that CCs won't make a difference.

[alsoknownasDean]

Yeah I do a bit of a hybrid of the two.

My normal spending is done with a Visa debit card with a fortnightly allowance on it (and 2% cashback on Paywave transactions), and my recurring stuff (bills, etc), I put on a no annual fee credit card (which simplifies things for me, I just pay it off once a month instead of ensuring I have enough in the account to meet a bill at a particular time).

That way I have an idea of how much I have left to spend for the fortnight, just by looking at the balance of my bank account, but I still have access to a credit facility if I need it.

[seattlecyclone]

I have found that I am just not built to manage credit cards, and unlike others, I have found that debit card + cash for certain things is my best and simplest straightforward option. I got annoyed by constantly reimbursing my credit card throughout the month and tracking things, which I found was a complete waste of my time.

You are aware that you can just pay off last month's full balance once per month and you won't be charged any interest, right? Most credit cards even let you set this payment up to recur monthly so you don't even need to think about it.

[2buttons]

I have found that I am just not built to manage credit cards, and unlike others, I have found that debit card + cash for certain things is my best and simplest straightforward option. I got annoyed by constantly reimbursing my credit card throughout the month and tracking things, which I found was a complete waste of my time.

You are aware that you can just pay off last month's full balance once per month and you won't be charged any interest, right? Most credit cards even let you set this payment up to recur monthly so you don't even need to think about it.

Yes, but I hate seeing a balanced owed even if I have the grace period.  I have run through every scenario including keeping the card in a box and it was just used to cover my monthly bills, but some bills don't allow for credit cards they require ach so running two systems just felt burdensome. I just found its so much simpler to have bills automatically debited from my checking that is a month ahead. No other websites to check, no other chance of shenanigans its all in one place.  Its really just way simpler for me, and I am trying to make money management as simple as possible, even if that means I lose out on some "rewards or cash back."

Just isn't worth the hassle for me two run two bill payment systems. 

[charis]

I track everything in Mint.  If I was just using one or two cards for regular rewards, it probably wouldn't mean much to avoid using cash.  But I go for signing bonuses that yield much higher returns.

[JoRocka]

Can you not condense your cards?   Sounds like the multiple spending is the problem- not the actual cash vs CC.

I personally don't like spending cash- I'm really weird about it- I'm a total cash hoarder. I should spend cash since I'm less likely to buy trivial things with it- but I prefer the card- easier to track my spending.

[HPstache]

Cash budgeting rocks.  I absolutely love doing it, and I recommend it to anyone.  I wrote a bit more in depth about my family's system in another thread, but do keep one of your cards for online purchases.  Have a big jar or something like that in your house that acts as a small bank to perform your online transactions with.  So if you buy something for $35.00 online, use your card, but take $40.00 from whatever category and put it in the jar and take $5.00 change.  By the end of the month what's in your jar should be equal to your CC bill if you're playing fair.

If you're a guy, find a wallet that has partitions in it to keep your categories separate.  If you're a gal, search for something like a "dave ramsey cash zipper wallet" on etsy and you'll find a bunch of great ones.

Our cash categories are:

Grocery
Date/Restraunt
Car Maintenance
House Maintenance
Pets
Gifts
Free spending money

We take out the cash at the beginning of each month, and once it's gone its gone... any extra goes towards savings or something like a trip you want to do.

[nottoolatetostart]

We are moving to cash for a number of reasons (obviously, this only applies to applicable categories - groceries, for example).

A few reasons:
- there are a few mom and pop stores within walking distance and I always feel like a jerk using my card. Many have a $10 card minimum. Sometimes I just need a pepper, not a whole cartload of food
- I also spend less using cash as others have stated.
- I also like the simplicity of leaving the store and being done with it. No going home, waiting for it to be pulled into YNAB, and then reconciling the statement. For some reason, the new YNAB has been messing up my credit card. No mistakes happen when I use cash.
- We have free ATM withdrawals throughout the world, so I can use any ATM on any corner without concern of fees. If I take out $300 cash from the ATM, I assign it to the correct category in YNAB (even if multiple categories). I have a cash wallet that I bought on Etsy with my fun money. It has labeled tabs for our categories and a zipper pocket. All the bells and whistles. It looks designer too. I never swap cash categories so I don't track each individual cash purchase.
- Biking the kids in the Burley to the store, using cash, bringing in my own bags and produce bags....it just makes me feel simple, happy, free and rich
- We use our credit card for everything else that we can and I pay it off every week or so

[redbird]

Can you not condense your cards?   Sounds like the multiple spending is the problem- not the actual cash vs CC.

This. If you can charge things to only 1 or 2 cards, it'll be a LOT easier to track your spending.

Something that might help too for sticking to your budget is to not allow yourself to impulse purchase things. Think about if something is an actual need versus a nice to have/want. If it's a nice to have/want, then allow yourself time to think about if you REALLY want it. For example, if you see something on sale - keep in mind that most of the time, store sales last several days or even a week. Also, things typically go on sale again at some later date. Give yourself at least a day or two to think about it. If it's more expensive and just a want, maybe you should think about it a little longer. If you still want it after some time passes and you can fit it into your budget, then maybe you should buy it. If you can't fit it into your budget and still want it, then maybe you can start putting a bit of money to the side every month until you can afford it.

[Frugal D]

I live in Canada, I use the Visa Infinite from Scotiabank, which is 4% on Gas and Groceries. My Amex Gold is 4% on Gas Groceries, Dining and Entertainment. Mostly everything else is 2% like recurring bills. TO get 4% on things like Best Buy I buy gift cards from grocery stores for the purchase.

Best Buy still exists?

[Chris22]

I live in Canada, I use the Visa Infinite from Scotiabank, which is 4% on Gas and Groceries. My Amex Gold is 4% on Gas Groceries, Dining and Entertainment. Mostly everything else is 2% like recurring bills. TO get 4% on things like Best Buy I buy gift cards from grocery stores for the purchase.

Best Buy still exists?

Amazon's Showroom.

[Money Manager]

Thanks for all the info.

A few things to note about some suggestions that were made.

MINT - I find this works well to see what I have spent but does not stop me from spending it. I think the cash would stop the spending or add that little extra (no money left) to my desires for goods to aid in the it's only 20$.

I had only 2 cards a few days ago. Did some research to see which I wanted to stay wit as a I think a Hybrid approach will work best in my situation. Its to easy to spend 8$ on a side order of eggs rolls which eating out. Gas however is a must so I'll put that on my cc.

I did something which I hope turns out well. I applied for 4 cards with really good sign up bonuses. About $250 per card. I plan on getting them, using the rewards then cancelling them. Extra 1K from how I see it.

[Goldielocks]

Cash budgeting rocks.  I absolutely love doing it, and I recommend it to anyone.  I wrote a bit more in depth about my family's system in another thread, but do keep one of your cards for online purchases.  Have a big jar or something like that in your house that acts as a small bank to perform your online transactions with.  So if you buy something for $35.00 online, use your card, but take $40.00 from whatever category and put it in the jar and take $5.00 change.  By the end of the month what's in your jar should be equal to your CC bill if you're playing fair.

If you're a guy, find a wallet that has partitions in it to keep your categories separate.  If you're a gal, search for something like a "dave ramsey cash zipper wallet" on etsy and you'll find a bunch of great ones.

Our cash categories are:

Grocery
Date/Restraunt
Car Maintenance
House Maintenance
Pets
Gifts
Free spending money

We take out the cash at the beginning of each month, and once it's gone its gone... any extra goes towards savings or something like a trip you want to do.

This is almost exactly what I do to create new money spending habits and it works so well.

The differences:
I dont' worry about car maintenance, as it is paid by cc and comes out of my emergency fund.  Free spending money is divided into a jar for each person in the family.   


I take out cash every two weeks to match pay cycle, and keep it under the
atm limit.  It is a great time to go with my husband and triggers a 5 minute budget conversation, which is all we needed, anyway.
Money rolls over into next month, same categories, not free spending.  Stealing between jars can be OK, and there is no tracking.  After a few months, adjust the cash categories.

[SeaEhm]

Credit cards making you spend too much?

Sounds like McDonalds is making people fat logic.


I would invest more time in learning to control your expenses while continuing to keep the benefits of credit cards.

Set up spending alerts.  I have one credit card that alerts me constantly through text when my account balance is over $100 or I spend over $50 in one transaction.

[matchewed]

So exactly what is getting hard to manage? Just saying hard to manage is too vague.

[Peter Parker]

Can you not condense your cards?   Sounds like the multiple spending is the problem- not the actual cash vs CC.

I personally don't like spending cash- I'm really weird about it- I'm a total cash hoarder. I should spend cash since I'm less likely to buy trivial things with it- but I prefer the card- easier to track my spending.

This.

I find it extremely to track using a credit card....but only one.  When I first started tracking spending, I had multiple cards.  It was too complicated.  I reduced all of my cards to one (Visa).  I also requested that my credit limit remained at a level that was close to my monthly budget--this way I had to be constantly be aware of not overspending.  Credit card was paid in full once each month.  Easy.

As I have gotten my spending under control using this method, I now have three credit cards--but only as a result of churning.  I only keep one at a time in my wallet.

That's my system.  Bottom line, you need a system that works for you....

[Shane]

- We have free ATM withdrawals throughout the world, so I can use any ATM on any corner without concern of fees. If I take out $300 cash from the ATM, I assign it to the correct category in YNAB (even if multiple categories). I have a cash wallet that I bought on Etsy with my fun money. It has labeled tabs for our categories and a zipper pocket. All the bells and whistles. It looks designer too. I never swap cash categories so I don't track each individual cash purchase.

Which bank are you using that gives you free ATM withdrawals worldwide?

Yesterday, we opened a checking account with Capital One 360 and ordered debit cards for the account. Capital One 360 said that they won't charge us any fees worldwide, but that we may be charged fees by owners of ATMs we use abroad.

It would be nice to not have to worry about any fees from the ATM...

[PAstash]

So I need some help with ditching the credit cards in favour of cash.

I have 3 cards which I pay off all the time and have not carried a balance in 5 years+.

The difficulty is I am putting a lot more now a days on to my cards and finding it annoying to keep track of everything. Cash seems to be a easy way to make sure I am not over spending.

Problem is my credit cards offer 4% back on almost all my purchases. I earn on average 900$ a year after card fees by using them. Is it worth ditching them to maybe regain control?

I would keep one small one for online stuff. Just not use it everyday for everything.

Thanks!

i used a chase 2% cash back card.

ALL my spending goes on that card to include monthly bills. It gets paid off at the end of the month. what's the problem? perhaps check out personal capital the app? or maybe mint?

[dreams_and_discoveries]

Wow, some of these systems sound very time intensive and a lot of work.

I use a free app to track everything; I add purchases on my phone at the time, and reconcile bank/credit card transactions once a month. Repeating transactions can be set up as well simply.

Once it becomes a habit to log all spending, it doesn't seem much work to me - I always carry my phone, and the app is easy to use.

I tend to use more cards for the cash back, and I never carry much cash anyway.

But as others have said, you need a system that works for you....is the main hassle working out how much you have left to spend? If so, how do you feel about logging purchases? I find it helps me be more mindful about the spending as well.....

[libertarian4321]

Cash?  What is this "cash" you speak of?

Is it those silly little pieces of paper I used to carry in my wallet in the 1980s?

I'm kidding. Sort of.

I put $40 in my wallet, and it last for months, because I buy almost NOTHING with cash.

Everything goes on the credit card, because I get a tiny percentage back, and I am not forced to carry those pieces of paper around.

And, of course, that credit cart gets paid off in full every month.  To not do so would be insane.

[BlueHouse]

I get the spending more with credit thing. It happens to me too. Many years ago I went on an all cash diet because psychologically it just helped me to think more about what I was spending on. To this day, every few months I go on an all-cash diet again for 30 days at a time. It just reminds me to be more mindful.
Sometimes to pull this off, I have to remove all credit (and debit) cards from my purse so I can only spend what I have. It's as if I forget that I'm on a budget until the shame of not having money reminds me. When I need or want something, I go home, get my arm card, go to the back and withdraw the cash. It really helps me.

[Metric Mouse]

Cash?  What is this "cash" you speak of?

Is it those silly little pieces of paper I used to carry in my wallet in the 1980s?

I'm kidding. Sort of.

I put $40 in my wallet, and it last for months, because I buy almost NOTHING with cash.

Everything goes on the credit card, because I get a tiny percentage back, and I am not forced to carry those pieces of paper around.

And, of course, that credit cart gets paid off in full every month.  To not do so would be insane.

Interesting. I totally agree plastic is easier to transport and faster to use. But I can often save more than the 3-4% cash back I'd get with a normal credit card by offering cash.  And I've got a few outstanding card balances that I am making minimum payments on because the returns on that money are greater than the interest being charged. Just interesting to see how different hacks work for different people in different places.

[libertarian4321]

Cash?  What is this "cash" you speak of?

Is it those silly little pieces of paper I used to carry in my wallet in the 1980s?

I'm kidding. Sort of.

I put $40 in my wallet, and it last for months, because I buy almost NOTHING with cash.

Everything goes on the credit card, because I get a tiny percentage back, and I am not forced to carry those pieces of paper around.

And, of course, that credit cart gets paid off in full every month.  To not do so would be insane.

Interesting. I totally agree plastic is easier to transport and faster to use. But I can often save more than the 3-4% cash back I'd get with a normal credit card by offering cash.  And I've got a few outstanding card balances that I am making minimum payments on because the returns on that money are greater than the interest being charged. Just interesting to see how different hacks work for different people in different places.

If you want to dick around "haggling" over every purchase, go for it.

Might be a good practice if you live in Pakistan. Albania, or Burma.

But in the USA, it's generally a waste of time. 

Walmart probably isn't going to "knock 3%" off that $1 pair of Made in China undies just because you want to dicker 3rd world style.  Home Depot isn't going to cut the price of the 2x4 from $3.97 to $3.82 just because you ask to see a manager to debate pricing.

And even if they did, is it really worth your time?

Yes, you will occasionally find some backwater gas station that offers "5 cents off" for cash.  In that case, go ahead and pay cash. That's why I still carry some cash, but rarely spend it- because once in a blue moon, you'll find that place while travelling through Hooterville.  But I would suggest that these sorts of places are a distinct and tiny minority of businesses in the USA.

I use the credit card for everything else.

And pay it off in full every month.  Never pay a penny in interest, never pay a penny in postage.

[Metric Mouse]

Cash?  What is this "cash" you speak of?

Is it those silly little pieces of paper I used to carry in my wallet in the 1980s?

I'm kidding. Sort of.

I put $40 in my wallet, and it last for months, because I buy almost NOTHING with cash.

Everything goes on the credit card, because I get a tiny percentage back, and I am not forced to carry those pieces of paper around.

And, of course, that credit cart gets paid off in full every month.  To not do so would be insane.

Interesting. I totally agree plastic is easier to transport and faster to use. But I can often save more than the 3-4% cash back I'd get with a normal credit card by offering cash.  And I've got a few outstanding card balances that I am making minimum payments on because the returns on that money are greater than the interest being charged. Just interesting to see how different hacks work for different people in different places.

If you want to dick around "haggling" over every purchase, go for it.

Might be a good practice if you live in Pakistan. Albania, or Burma.

But in the USA, it's generally a waste of time. 

Walmart probably isn't going to "knock 3%" off that $1 pair of Made in China undies just because you want to dicker 3rd world style.  Home Depot isn't going to cut the price of the 2x4 from $3.97 to $3.82 just because you ask to see a manager to debate pricing.

And even if they did, is it really worth your time?

Yes, you will occasionally find some backwater gas station that offers "5 cents off" for cash.  In that case, go ahead and pay cash. That's why I still carry some cash, but rarely spend it- because once in a blue moon, you'll find that place while travelling through Hooterville.  But I would suggest that these sorts of places are a distinct and tiny minority of businesses in the USA.

I use the credit card for everything else.

And pay it off in full every month.  Never pay a penny in interest, never pay a penny in postage.

I guess the kind of person that only shops at Walmart and Home Depot would probably not realize there are places that give upfront marked discounts for cash.